Saturday, November 5, 2011

Inside unending education subsidy

After giving us publicly available facts and their citations, the author offers this picture:
Among the 221 graduates of the 2010 class of Thomas Jefferson, only 73 obtained jobs as lawyers. According to information provided by the school, the highest earners worked in private law firms, with a 75th percentile salary of $77,500 (only 12 of 55 graduates in private firms reported their salary). Based upon the numbers provided, and making a few reasonable assumptions, we can estimate that at least 80% to 90% of the class earned less than $77,500.

Now consider that the average debt of 2010 graduates of Thomas Jefferson was $137,000 (95% of the class had debt). The monthly payment for this debt is $1,600. Graduates must earn over $100,000 to manage this level of debt.

Thus, only about one third of graduates actually ended up as lawyers (nine months after graduation), and most of the graduates that landed lawyer jobs did not earn enough to manage the average debt of the class. It appears that a significant percentage of the class is likely to enroll in IBR, a federal program designed to help graduates in “financial hardship,” paying reduced monthly payments based upon a percentage of their income, with the balance of the loan forgiven after 25 years. That is what “access” to a legal career comes to for many unfortunate law graduates today.

What Federal Loans Do for Law Students and Law Schools - The National Law Journal's Law School Review
Sat, 5 Nov 2011 18:59:57 UTC
Meanwhile, tuition keeps rising. Is that a bubble inspired by regulation? So far, the answer offered is not to transform the system, but to restructure the debt and offer more amenable haircuts. Does that sound like Greece?

A Faculty Productivity and Costs at The University of Texas at Austin report found, among other things:
  1. Looking only at the UT Austin campus, if the 80 percent of the faculty with the lowest teaching loads were to teach just half as much as the 20 percent with the highest loads, and if the savings were dedicated to tuition reduction, tuition could be cut by more than half (or, alternatively, state appropriations could be reduced even more—by as much as 75 percent).
  2. 20 percent of UT Austin faculty are teaching 57 percent of student credit hours. They also generate 18 percent of the campus’s research funding.
  3. The least productive 20 percent of faculty teach only 2 percent of all student credit hours and generate a disproportionately smaller percentage of external research funding.
  4. Research grant funds go almost entirely (99.8 percent) to a small minority (20 percent) of the faculty; only 2 percent of the faculty conduct 57 percent of funded research.
It appears there are many issues with higher education. We have not even begun to talk about the lack of technology use.

Recently professors from top ten schools on a popular education site were debating how to limit laptops in class because key strokes were distracting. They were also dismayed that students asked if the lecture could be emailed to them, which destroyed their incentive to come to class. Is there no better use of lecture time than to listen to a professor regurgitate his notes on Power Point?

Markets are fantastic at driving prices down and ultimately staying on focus. Could they provide an answer? For many decades now, that possibility has been ignored.

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